All Eyes On Nur-Sultan - Financial Centre Futures - May 2021 - Long Finance
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All Eyes On Nur-Sultan May 2021 Financial Centre Futures
We are pleased to present a short update on the progress being made in the Astana
International Finance Centre (AIFC). AIFC is a member of Z/Yen’s Vantage Financial Centres
network. The aim of this update is to provide readers with news about the exciting progress
being made by the city of Nur-Sultan in attracting more financial services activity to the area.
Nur-Sultan, previously named Astana until 2019, is the young and fast-growing capital city of
Kazakhstan. The city has cemented its role as a political and cultural centre of Kazakhstan and
Central Asia. The launch of Astana International Financial Centre (AIFC) in 2018 has become
the catalyst in developing Nur-Sultan as an investment and financial hub and strengthening its
role among world financial centres as reflected by the city's progress in the GFCI.
The vision of the AIFC is to become the leading international financial centre in the region (i.e.
Central Asia, Caucasus, EAEU, Western China, Mongolia, and Eastern Europe). The AIFC’s
mission is to contribute to the sustainable economic development of the region by fostering
innovative financial products and services.
The Constitutional Statute on the AIFC defines the following objectives:
1. Assisting in investment attraction into the economy of Kazakhstan by creating
an attractive environment for investment in the financial services sphere;
2. Developing a securities market and integrating it with international capital
markets;
3. Developing insurance markets, banking services, Islamic finance, financial
technologies, electronic commerce and innovative projects;
4. Developing financial and professional services based on international best
practice;
5. Achieving international recognition as a
financial centre.
For more information, please contact:
AIFC Authority
Daniyar Kelbetov, Managing Director
d.kelbetov@aifc.kz / +7 (7172) 61 3626
Or
Z/Yen Partners Limited
Mike Wardle, Director & Head Of Indices
mike_wardle@zyen.com / +44 (0) 7880 737319
All Eyes On Nur-Sultan 2021
Kazakhstan - The Place To Watch
Kazakhstan is a rapidly developing country with huge investment potential and
business opportunities
Among the top ten geographically largest countries, Kazakhstan is globally known as
a geologically diverse land with immense stocks of natural resources. Long seen as a
commodity-rich country, Kazakhstan’s offerings today lie far beyond its natural
resources.
Priority sectors of the economy with high investment potential
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All Eyes On Nur-Sultan 2021
Kazakhstan is a gateway to the neighbouring markets with over 500 million consumers.
− Member of the WTO
− Member of the Eurasian Economic Union (EAEU) with preferential
access to a common market with more than 180 million consumers
− One of the key participants in the Belt and Road Initiative
Robust transport and communication infrastructure
Kazakhstan has the highest internet penetration rate in the region with 77%,
and 4G network availability is even higher (85%).
The country has 24 airports (i.e., 72 air corridors). Recently Kazakhstan took a step towards
more liberalisation in air transport by adopting the Fifth Freedom of The Air. This policy will
undoubtedly attract more flights going forward. Before the pandemic, direct regular flights
from the capital, Nur-Sultan, were available to 26 countries on 97 routes. Destinations
include Frankfurt, London, Moscow, Dubai, Hong Kong, and Seoul. By 2025, regular flights
are planned to an additional 20+ destinations – New York, Hong Kong, Singapore, Shanghai,
Zurich and others.
Kazakhstan is strategically located in the centre of Eurasia and accounts for 70 per cent of
transit railroad traffic between China and Europe, as well as in other directions.
For example, the Western Europe–Western China Transcontinental Auto Expressway allows
products to be shipped between China and Europe in just 10 days (i.e. four times faster
than sea transit).
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All Eyes On Nur-Sultan 2021
Kazakhstan’s favourable investment climate
Kazakhstan was ranked 25th in the World Bank's 2020 Ease of Doing Business Index.
Kazakhstan’s highly skilled and cost-effective human capital
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All Eyes On Nur-Sultan 2021
AIFC: Central Asia’s Leading International Financial
Centre
The Astana International Financial Centre (AIFC) was officially launched in 2018 in the city
of Nur-Sultan, the capital of Kazakhstan, to contribute to the sustainable economic
development of the region by fostering innovative financial products and services.
With a range of mechanisms to ensure lucrative projects in the region, attracting
investment in a transparent and efficient manner, the AIFC has rapidly grown over the
last three years.”
AIFC bodies and organizations, with their relentless adherence to international standards,
fairness and efficiency, ensured the successful formation of the AIFC as a globally
recognized international financial centre. World-renowned financial institutions such as the
Shanghai Stock Exchange, Nasdaq, Goldman Sachs and the Silk Road Fund have become
shareholders of Astana International Exchange (AIX), one of the core organizations of the
AIFC. The AIFC now hosts 750 companies from 51 countries, including the China
Development Bank and the China Construction Bank.
In its strategy until 2025, the development of the AIFC is aimed at increasing its operational
and financial efficiency in order to consistently achieve financial sustainability. The AIFC has
set clear goals for itself to continue to grow as a local investment hub and become a
regional financial centre:
The AIFC’s Environment Stimulates Business Growth
1 For more detail, see Constitutional Statute of The Republic of Kazakhstan on The Astana International
Financial Centre, Constitutional Statute No. № 438-V ZRK of 7 December 2015 (with Amendments as of
30 December 2019, Which Commence on 11 January 2020): https://aifc.kz/files/legals/7/file/
constitutional-statute-with-amendments-as-of-30-december-2019.pdf
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All Eyes On Nur-Sultan 2021
The AIFC In Numbers
750 120+ 29
Companies from 51 Number of start-ups Firms accepted to the
countries are based at incubated through the AFSA Fintech Lab (AIFC’s
the AIFC AIFC regulatory sandbox)
12,000 247
AIFC reserve pool of Lawyers registered at
local professionals the AIFC Court for rights
of audience from 24
jurisdictions globally
$31+ $2.6
56
bn bn
Licensed and recognized Total market Direct investments
financial institutions in capitalization of attracted through the
the AIFC companies listed on the AIFC
Astana International
Exchange
5
All Eyes On Nur-Sultan 2021
International Comparisons
Nur-Sultan In the Global Financial Centres Index
In March 2007, Z/Yen released the first edition of the
Global Financial Centres Index (GFCI), which
continues to provide evaluations of competitiveness
and rankings for the major financial centres around
the world. The GFCI is updated every March and
September and receives considerable attention from
the global financial community.
The index serves as a valuable reference for policy
and investment decisions. The 29th edition of the
GFCI (GFCI 29) was published in March 2021. The
GFCI measures the competitiveness of financial
centres across five broad areas—the Business
Environment, Human Capital, Infrastructure,
Financial Sector Development, and Reputation.
GFCI 29 is compiled using over 130 instrumental factors. These quantitative measures are
provided by third parties including the World Bank, The Economist Intelligence Unit and the
United Nations. The instrumental factors are combined with over 30,000 financial centre
assessments provided by respondents to an online questionnaire.
Nur-Sultan was first listed in the GFCI in 2018, in GFCI 23. It ranked 88th in the world
in that edition, with a rating of 548 (on a scale of 1,000). In GFCI 29, Nur-Sultan ranked
78th, with an almost 40 point improvement in its rating to 586. This improving trend
demonstrates considerable progress.
The GFCI includes sub-indices showing results taking account of survey responses from
a number of finance industry sectors. Nur-Sultan scores higher than its overall ranking
in the banking, investment management, professional services, government &
regulatory, and trade finance sectors.
Nur-Sultan In the Global Green Finance Index
The Global Green Finance Index was first published in March
2018. The 7th edition (GGFI 7) was published on 29 April
2021. Nur-Sultan has entered the GGFI for the first time in
this edition, and has entered in a leading position in the
Eastern Europe & Central Asia region, ranked 57th in the
world, and first in the region.
6
All Eyes On Nur-Sultan 2021
Fintech in Kazakhstan and the AIFC
Developed infrastructure and favourable market conditions make Kazakhstan a prominent
player in the global financial technology (fintech) industry.
AIFC Enables The Growth Of FinTech
Kaspi.kz, the largest payment, trading platform and financial technology ecosystem in
Kazakhstan, went public in 2020, with an initial public offering (IPO) on the Astana
International Exchange (AIX) and the London Stock Exchange (LSE). Kaspi.kz’s IPO on LSE
and AIX valued the company at $6.5 billion, making it Kazakhstan’s most valuable publicly
traded company. Today, its market capitalisation is over $12.96 billion.
Kaspi.kz operates the Kaspi.kz super app, the most popular mobile app in Kazakhstan.
With a population of 18 million in Kazakhstan, Kaspi.kz has 7.8 million monthly active
users.
7
All Eyes On Nur-Sultan 2021
The AIFC develops a business and regulatory environment conducive to disruptive and
consumer-oriented innovation. Part of the AIFC's strategy to attract global investment is
to focus on improving efficiency, expanding access, and increasing the diversity of
financial products and services through fintech.
8All Eyes On Nur-Sultan 2021
Currently, the AIFC Fintech Hub works with over 120 start-ups from Kazakhstan and Central
Asia. All of them are focused on providing digital financial services – from biometrics to
contactless payments.
The AIFC is the first jurisdiction in the Eurasian region to support regulatory regimes for
new forms of investments, including crowdfunding, initial coin offerings (ICOs), trading
with digital assets, testing and developing fintech services under the regulatory sandbox
regime called FinTech Lab, and cross-border testing of fintech activities in several
jurisdictions under the Global Financial Innovation Network (a network of financial
regulators).
9All Eyes On Nur-Sultan 2021
Financial Deepening
To attract people not previously familiar with the stock market and provide them with
the opportunity to start investing in the long term, the Astana International Exchange has
developed a tool for investing in securities: the Tabys mobile app.
With the Tabys mobile app, any Kazakhstani can start investing by purchasing exchange-
traded notes (ETNs). A feature of the Tabys app is that retail investors can buy ETNs for
between $10 and $35, which means they do not need to have any significant savings to
try to invest. The rights of Tabys users are protected by the Astana Financial Services
Authority.
10All Eyes On Nur-Sultan 2021
The AIFC And Green Finance
As Kazakhstan transitions towards a green economy, the near-term focus will be on
rationalising the use of natural resources and implementing renewable energy and energy
-saving technologies on a large scale.
Recognising the need to incentivise market financing of green projects, the AIFC launched
the Green Finance Centre (GFC) and developed a comprehensive strategy on green
finance and procedures on green bond issuance.
The GFC provides initial assistance to potential green bond issuers and investors, and
introduced subsidies for green projects into the national legislation. The centre also
covers expenses incurred by issuers in providing the mandatory external review of green
bonds.
Recently, GFC supported the issuance of the first-ever green bonds in Kazakhstan by the
Damu Entrepreneurship Development Fund, a government-backed development
institution that placed bonds on AIX in August 2020 to raise capital and support SMEs.
As Kazakhstan focuses on developing the circular economy in the coming years, the GFC
will help green industries raise funds through the debt market and assist companies in
reformulating internal policies to improve environmental, social, and corporate
governance practices.
11All Eyes On Nur-Sultan 2021
The AIFC Ecosystem
AIFC Authority is AIFC Court is the AIFC Astana Financial
the body responsible court for civil and International Services Authority
for the formation of commercial dispute Arbitration is the integrated
the development resolution within the Centre provides regulator of all
strategy and AIFC. It is the first an independent, market activities,
promotion of the common law- based cost-effective, and ancillary service
financial centre, as court in the Central fast alternative to providers, and
well as for providing Asian region. litigation. companies within the
conditions for the AIFC.
activities of the
bodies of the AIFC, its
participants and their
employees.
Astana The AIFC Green The AIFC Fintech The AIFC Bureau
International Finance Centre Hub utilises the for Continuing
Exchange is a high- promotes the AIFC as latest financial Professional
tech exchange, which a hub for green technologies to Development is a
uses the Nasdaq financing in the future-proof the centre of excellence
trading platform. AIX region, offering AIFC’s key business for professional and
gives access to all the strategic solutions to pillars and to human capital
main capital market governments, develop a vibrant development within
instruments. financial institutions multi-stakeholder the AIFC.
and enterprises, and fintech ecosystem,
facilitating the bringing together
issuance of green financial
bonds. institutions,
technology partners,
fintech companies,
The AIFC Expat Centre is a one- stop AIFC Business Connect provides
shop for fostering the expedited investors and the international
integration of foreign nationals into business community with the fully
Kazakhstan’s society. Foreign structured information and close
nationals can access a variety of support they need to access and
government and socially oriented invest in opportunities. available in
“soft-landing” services in English. Kazakhstan.
12All Eyes On Nur-Sultan 2021
Highlights Of Activities Of The AIFC
• The AIFC became fully operational in 2018. • Green bond taxonomy was introduced in
2019.
• AIFC participants include 750 companies
from 51 countries. • The listing of the first ETF on AIX: ITI Funds
Russia-focused USD Eurobond UCITS ETF
• Parties can file cases at the AIFC Court and SICAV (“ITI ETF”).
IAC via “eJustice” online portal.
• The first cross-listing of $500 million sukuk
• Potential and existing participants of the on AIX was issued by Qatar International
AIFC can establish and conduct business Islamic Bank with primary listing on the
electronically within the jurisdiction of the London Stock Exchange.
AIFC through the “e-Residence” online
platform. • The first RMB (Chinese yuan) bond of the
China Construction Bank Corporation
• The legal and regulatory framework Astana branch was listed on AIX and the
leverages international standards (IOSCO, Hong Kong Exchange in the amount of
Basel, IFSB, AAOIFI, IAIS, OECD, FATF, IFRS RMB 1 billion.
and US GAAP).
• AIX launched a new Regional Equity
• The AIFC became a signatory to the IOSCO Market Segment, offering midsize
enhanced multilateral memorandum of companies in Kazakhstan and Central Asia
understanding concerning consultation and easier access to public equity finance.
cooperation and the exchange of
information (IOSCO EMMoU) and member • First listing of green bonds issued by the
of the International Association of Damu Fund in the amount of 200 million
Insurance Supervisors (IAIS) multilateral KZT.
memorandum of understanding in 2020.
• In 2018 the Kazakhstan Investment
Development Fund was established to
attract investments on the principle of co-
investing in breakthrough projects in
Kazakhstan.
13PRODUCED BY www.zyen.com Z/Yen helps organisations make better choices – our clients consider us a commercial think tank that spots, solves and acts. Our name combines Zen and Yen – “a philosophical desire to succeed” – in a ratio, recognising that all decisions are trade-offs. One of Z/Yen’s specialisms is the study of the competitiveness of financial centres around the world. A summary of this work is published every six months as the Global Financial Centres Index. Z/Yen also publishes the Global Green Finance Index and the Smart Centres Index. AND https://aifc.kz Astana International Financial Centre (AIFC) plays a pivotal role in positioning itself as a global centre for business and finance, connecting the economies of the Central Asia, the Caucasus, EAEU, Western China, Mongolia, and Eastern Europe. It is a unique hub on the map of the financial world that brings together the best practices and opportunities offered by similar institutions around the globe – from New York City and London to Dubai, Hong Kong, and Singapore. PUBLISHED BY FINANCIAL CENTRE FUTURES - PART OF THE LONG FINANCE INITIATIVE www.globalfinancialcentres.net www.vantagefinancialcentres.net Financial Centre Futures is a programme Vantage Financial Centres (VFC) is an within Long Finance that initiates exclusive network of financial centres discussion on the changing landscape of around the world which offers enhanced global finance. Financial Centre Futures access to GFCI data, marketing comprises the Global Financial Centres opportunities, and training for centres Index, the Global Green Finance Index, the seeking to enhance their profile and Smart Centres Index and other research reputation. publications that explore major changes to the way we will live and work in the financial system of the future.
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